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V0848-18 26 March 2018 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · régimen especial de fusiones

Mergers may qualify for special regime if driven by valid economic reasons rather than tax advantages

The applicant asks whether a merger operation can apply the special regime for Corporate Income Tax. The DGT rules that this is possible provided the operation meets commercial requirements and is driven by valid economic motives, such as the rationalisation of activities, rather than the mere pursuit of a tax advantage.

The question raised

Question posed: Whether the described operation could qualify for the special tax regime provided for in Chapter VII of Title VII of Law 27/2014, of November 27, on Corporate Income Tax.

The DGT's ruling

To apply the special merger regime, the operation must be carried out in accordance with the Law on Structural Modifications and must have valid economic reasons, such as the restructuring or rationalization of activities. The existence of tax loss carryforwards in the absorbed entity does not prevent the regime if the aim is to improve the financial situation of the resulting activities. The offsetting of such losses in the absorbing entity shall be subject to the limits set forth in Articles 84 and the sixteenth transitional provision of the Corporate Income Tax Law.

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